Ahead of Market: 12 things that will decide stock action on Monday

Ahead of Market: 12 things that will decide stock action on Monday

NEW DELHI: After recovering almost completely from Monday’s dip, Nifty formed a bullish candle on Thursday in the truncated week. On the weekly scale, the index closed at almost the same level it opened.

Rohit Singre, Senior Technical Analyst, LKP Securities, said Nifty50 index reached its upper band of resistance which was at 13,775. He added, “Going forward, if index managed to sustain above the said level then we may see the extension in rally otherwise we may see some profit booking in the index, support for Nifty is coming near 13,680-13,600 zone.”

“Almost all the major sectors participated in this up move, except for IT and tech and capital goods. Banking, healthcare, and consumer durables displayed immense amounts of exuberance, and the overall sentiment reflected what is happening in the eastern markets and early Europe. Markets may be looking for positive cues from global markets in the coming days, as they reopen after a fairly long weekend after Christmas,” said Joseph Thomas, Head of Research, Emkay Wealth Management.

That said, here’s a look at what some of the key indicators are suggesting for Monday’s action:

Wall Street closes with modest gains
The S&P 500 ended higher at the close of a shortened session on Thursday as investors headed into the long Christmas weekend with hopes that an imminent stimulus agreement, a Brexit deal, and the ongoing vaccine rollout will spell brighter days in the coming year. The Dow Jones Industrial Average rose 0.23%, the S&P 500 gained 0.35% and the Nasdaq Composite added 0.26%.

European stocks end on high note with Brexit deal in sight
European shares rose for a third straight session on Thursday with a Brexit trade deal finally in sight just a week before Britain cuts its ties with the European Union. Brexit-sensitive banks led the pan-European STOXX 600 index 0.2% higher. France’s CAC 40 closed down 0.1%. Stock markets in Germany, Italy and Switzerland were closed for the Christmas holidays.

Tech View: Weekly chart signals likely weakness ahead
Nifty formed a bullish candle on the daily chart and a long-legged Doji on the weekly chart. The latter indicated indecision about the future direction. “A sustained trade above 13,780 level may extend the gains to 13,950-14,100 levels. However, a failure to trade and sustain beyond 13,780 level could trigger profit booking and drag the index lower to 13,650-13,550 levels,” said Aditya Agarwala, Senior Technical Analyst, YES Securities.

Check out the candlestick formations in the latest trading sessions


F&O: Cooling VIX aiding bulls
India VIX fell 2.60% from 20.49 to 19.96 level. The cooling of volatility at higher levels has provided support for a decent bounceback and now it has to hold below 19 level to help the bulls hold a grip on the market. On the options front, maximum Put open interest stood at 13,000 level followed by 13,500, while maximum Call OI was at 14,000 followed by 14,500 levels. There was Call writing at 14,000 and then 14,200 levels while Put writing was seen at 13,700 and then 13,600 levels.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Thursday showed bullish trade setup on the counters of Vedanta, Firstsource Solution, NHPC, Reliance Industries, Confidence Petroleum, Cadila Healthcare, NIIT Ltd, Shrenik Ltd, Jubilant Life Sciences, among others.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of L&T, Titan Company, Godrej Properties, Oberoi Realty, Kansai Nerolac Paint, Burnpur Cement, Gujarat Industries Power Company, Ducon Infratech, MSP Steel & Power, Zodiac Clothing, Palash Securities, Raj Television Network, Sakar Healthcare, Centum Electronics, JSW Holdings, among others.

Thursday’s most active stocks
Vedanta (Rs 4,373.89 crore), Mrs. Bectors Food Specialities (Rs 2,125.54 crore), RIL (Rs 1,894.10 crore), Bajaj Finance (Rs 1,354.80 crore), Tata Motors (Rs 1,296.10 crore), Bharti Airtel (Rs 1,079.39 crore), HDFC Bank (Rs 1,041.49 crore), Axis Bank (Rs 942.10 crore), Infosys (Rs 903.90 crore) and ICICI Bank (Rs 900.56 crore) were among the most active stocks on Dalal Street on Thursday in value terms.

Thursday’s most active stocks in volume terms
Vodafone Idea (Shares traded: 40.90 crore), Vedanta (Shares traded: 27.10 crore), YES Bank (Shares traded: 12.44 crore), PNB (Shares traded: 11.11 crore), SAIL (Shares traded: 8.94 crore), Tata Motors (Shares traded: 7.38 crore), RattanIndia Power (Shares traded: 7.37 crore), JP Associates (Shares traded: 5.70 crore), ONGC (Shares traded: 4.63 crore) and Bank of Baroda (Shares traded: 3.91 crore) were among the most traded stocks in the session.

Stocks showing buying interest
Indiabulls Ventures (PP), Firstsource Solutions, Whirlpool India, Asahi India Glass and Vedanta witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Thursday, signalling bullish sentiment.

Stocks seeing selling pressure
Fairchem Organics, Jump Networks, Ravinder Heights, Anant Raj Global witnessed strong selling pressure in Thursday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.

Sentiment meter favours bulls
Overall, market breadth remained in favour of bulls. As many as 288 stocks on the BSE 500 index settled the day in green, while 207 settled the day in red.

Podcast: Risks of investing in a liquidity-fuelled bull market >>>

Was the Monday mayhem an over-reaction to the new strain of coronavirus or does it indicate that the domestic equity market is a tinderbox looking for a spark? We find out the risks of investing in this bull run and more in today’s special podcast with independent market expert Rajiv Nagpal.

Source link


Please enter your comment!
Please enter your name here